District Barred From Processing Union Mailings

WASHINGTON--Acting in a case with financial implications for
teachers' unions, the U.S. Supreme Court ruled last week that federal
postal laws prohibit school districts from using their internal mail
systems to deliver union letters to school employees.

In a 6-to-2 decision, the Court held that such action--whether
mandated by state labor law or agreed to under a contract--runs afoul
of the Congress's intent to establish the U.S. Postal Service as a
monopoly.

Teachers' unions nationwide have negotiated contracts with school
boards granting them access to districts' mail systems.

The ruling will force locals of the American Federation of Teachers,
the National Education Association, and other unions representing
school workers that have reached such agreements to begin stamping mail
to members and sending it through the Postal Service, or to find other
means of delivery.

Lawyers for the unions contend that the ruling in Regents of the
University of California System v. Public Employment Relations Board
(Case No. 87-935) will not necessarily deny them access to individual
teachers' school mailboxes, but only to districts' centralized
mail-collection and sorting facilities and delivery systems that cross
postal routes. In many cases, they say, collective-bargaining
agreements will continue to allow members to bring union letters to
individual schools and deposit them in employees' mailboxes.

James N. Odle, the lawyer who represented the University of
California in the case, agreed with the unions' interpretation of the
decision. Because such deliveries would not involve the crossing of
postal routes, he said, they would be permissible under federal
law.

"You could characterize [the decision] as inconvenient or a pain in
the neck, but not as a budget-buster,'' said Robert H. Chanin, the
NEA's general counsel.

His counterpart at the AFT, Lawrence A. Poltrock, added that the
ruling would have less impact on his union than on the NEA because AFT
locals traditionally have relied more heavily on union hand-delivery of
mail than on districts' internal delivery systems.

Unfair Labor Charge

The case before the Court began in 1979, when a local chapter of the
American Federation of State, County, and Municipal Employees filed a
charge of unfair labor practices with the state Public Employment
Relations Board against the University of California at Berkeley.

The union claimed that the university had violated the state's
higher-education collective-bargaining law by barring it from
distributing letters through the university's internal-mail system to
employees that it hoped to organize.

Union officials said that such access was mandated under the state
law, but the university countered that it would violate the federal
Private Express Statutes, which generally prohibit mail-carrying by
anyone other than the Postal Service.

The dispute eventually came before the California Court of Appeals,
which held that the university's delivery of union mail fell under two
exceptions to the federal postal rules--the "letters of the carrier''
exception, which permits an entity to run its own mail system provided
that the mail concerns the institution's "current business,'' and the
"private hands without compensation'' exemption, which permits private
delivery of letters without payment or benefit for the service. The
state supreme court declined to review the appellate ruling.

Analysis Rejected

The High Court rejected that analysis in an opinion written by
Associate Justice Sandra Day O'Connor and joined in full by Chief
Justice William H. Rehnquist and Associate Justices William J. Brennan,
Harry A. Blackmun, and Antonin Scalia. Associate Justice Byron H. White
wrote a separate concurring opinion.

"Precisely what constitutes a carrier's 'current business''' under
the letters-of-the-carrier exception "is not defined by the postal
laws,'' Justice O'Connor noted.

"The ordinary sweep of the term, however, falls far short of
encompassing the letters involved in this case.''

She said that the letters at issue in the case "can be accurately
described only as the union's current business'' and not the
university's.

"It strains the statutory language to contend that the phrase
'current business' includes such activity,'' she added.

She also rejected the argument that the union mail would fall under
the private-hands exception.

"[W]e hold that the private-hands exception is available only when
there is no compensation of any kind flowing from the sender to the
carrier,'' the Justice wrote. "Here there is an arms-length business
relationship between the union and the employees on the one side and
[the university] on the other.

"By delivering the union's letters,'' she continued, the university
"would perform a service for its employees that they would otherwise
pay for themselves, through their union dues.''

"This service would become part of the package of monetary and
nonmonetary benefits that [the university] provides to its employees in
exchange for their services,'' she wrote. "In our view, the carriage of
the union's letters pursuant to such an exchange of benefits
necessarily means that the carriage is not 'without
compensation.'''

In a dissenting opinion, Associate Justices John Paul Stevens and
Thurgood Marshall said that the letters should have fallen under the
private-hands exception because, by delivering them, the university was
only following state law.

Dissenting View

"[N]o good will, at least no good will that qualifies as
compensation, can be thought to arise merely because an entity does
precisely what state law compels it to do,'' Justice Stevens wrote.

In a footnote, however, he said that improper compensation would
occur under a similar arrangement provided for under a
collective-bargaining agreement.

Under such a plan, he said, a district would receive "something of
value in exchange for its agreement to provide the service.''

The Court's newest Associate Justice, Anthony M. Kennedy, took no
part in the decision.

Taxes on Bonds

Acting in another case last week, the Court ruled 7 to 1 that the
Congress is free to tax all interest on state and local government
bonds.

Although such action by the Congress is not imminent, some financial
analysts said the decision in South Carolina v. Baker (No. 94 Original)
could make it more difficult for states and municipalities to raise
capital for education and other social services.

In addition to issuing bonds to finance school construction and
renovations, some states have recently begun issuing bonds to encourage
parents to save for their children's college education.

"We see no constitutional reason for treating persons who receive
interest on government bonds differently than persons who receive
income from other types of contracts with the government, and no
tenable rationale for distinguishing the costs imposed on states by a
tax on state bond interest from the costs imposed by a tax on the
income from any other state contract,'' wrote Justice Brennan for the
majority.

In the sole dissent in the case, Justice O'Connor noted that if
interest on government bonds were taxed, "the cost of borrowing by
state and local governments would rise substantially.''

"This certainly would affect seriously state and local government
revenues,'' she wrote.

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